TIDMDNLM
RNS Number : 5964B
Dunelm Group plc
08 January 2015
8(th) January 2015
Dunelm Group plc
TRADING UPDATE
26 weeks to 27(th) December 2014
Dunelm Group plc ("Dunelm" or "the Group"), the UK's leading
homewares retailer, issues the following trading update in respect
of the 26 week period to 27(th) December 2014.
Revenue
Group revenue for the period was:
H1: FY15 H1: FY14
------------------------------- ---------- ----------
Total sales GBP406.4m GBP356.4m
------------------------------- ---------- ----------
Total sales growth +14.0% +4.8%
------------------------------- ---------- ----------
LFL sales growth/decline(1) +6.2% -0.9%
------------------------------- ---------- ----------
Total revenue for the half year grew by 14.0%, as a result
of:
- Good performance in LFL stores (3.5% LFL growth excluding on-line home delivery)
- Continuing store portfolio expansion, with six new superstore
openings (one of which was a relocation of a high street store)
- Significant growth in on-line business, including over 70% increase in home delivery sales
The departments making the largest contribution to growth
were:
- Furniture, which increased by almost 60% to exceed GBP20m sales in the period
- Made to measure curtains and blinds, driven in part by the
increased geographic reach of our Dunelm At Home service
In addition, growth in the half year reflected weak sales in the
early part of the comparable period last year (due to the July 2013
heatwave).
Gross Margin
Gross margin percentage for the half year is estimated to be at
the same level as the first half of last financial year. Following
margin growth in the first quarter, we have seen this reverse in
the second quarter as foreign exchange benefits have dropped
away.
Operating Costs and Profit Before Tax
As planned, operating expenditure has risen in key functions to
support our strategic initiatives aimed at further growth in
revenues and market share. Specifically, this includes: new stores
operating costs; online home delivery fulfilment costs; Dunelm At
Home staffing investment; additional marketing investment; and
development of capabilities in support functions such as IT and
Merchandising.
In addition, our increased commitment to furniture has driven a
significant uplift in our logistics costs. This includes costs
related to external storage locations away from our Stoke
distribution centre to support increased furniture volumes.
Taking into account these factors, we anticipate that operating
expenses for the half year will amount to approximately GBP137m and
profit before tax will be in the region of GBP68m.
Store Numbers
The total number of superstores trading at the period end was
142. There were eleven new stores committed as at the period end,
including one relocation. We expect six of these new stores will
open in the remainder of this financial year, taking our total
anticipated openings for the financial year to 12, and bringing the
year-end superstore count to 148. Our medium term target remains to
operate from around 200 superstores across the UK.
Financial Position
The Group remains strongly cash generative with closing net
cleared funds at bank of GBP61.4m. Daily average cleared funds
across the half year amounted to GBP49.4m.
Commenting on Dunelm's performance in the period, Will Adderley,
Chief Executive, said:
"I am pleased with our trading through our first half. Whilst we
were up against weak comparatives in the first quarter, this was
not the case in the second quarter so like for like growth of over
4% in that period is a strong result - thanks to the hard work of
our teams in stores and throughout the business.
"My priority going forward is to achieve growth consistently
from each of our channels, including our core superstore format. We
are excited by the opportunities available to us both from stores
and online and we will continue to make the capital and revenue
investments necessary to seize them."
For further information please contact:
Dunelm Group plc 0116 2644 356
Will Adderley, Chief Executive
David Stead, Finance Director
MHP Communications 020 3128 8100
John Olsen / Simon Hockridge
Forthcoming Newsflow.
Dunelm will release its interim results on 11(th) February 2015.
There will be a presentation for analysts at 9.30am at the offices
of UBS, 1 Finsbury Avenue, London EC2M 2PP. Those analysts who wish
to attend are requested to contact Naomi Lane of MHP on the above
number or at naomi.lane@mhpc.com. A copy of the presentation will
be made available on the Dunelm website.
Notes
1. Like for like sales represent revenues from stores trading
for at least one full financial year prior to 28(th) June 2014 and
exclude stores with significant change of space in the current or
previous financial year.
2. Quarterly sales and margin analysis:
Year to 27(th) June
2015
--------------------- ----------------------------------
Q1 Q2 H1
--------------------- ---------- ---------- ----------
Total sales GBP180.6m GBP225.8m GBP406.4m
--------------------- ---------- ---------- ----------
Total sales growth +17.0% +11.8% +14.0%
--------------------- ---------- ---------- ----------
LFL sales growth +8.9% +4.2% +6.2%
--------------------- ---------- ---------- ----------
Gross margin growth +40bps -30bps* level(*)
--------------------- ---------- ---------- ----------
(*) estimated
Year to 28(th) June 2014
--------------------- ----------------------------------------------------------------------------------
Q1 Q2 H1 Q3 Q4 H2 FY
--------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total sales GBP154.3m GBP202.1m GBP356.4m GBP195.4m GBP178.4m GBP373.8m GBP730.2m
--------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total sales growth +1.7% +7.3% +4.8% +9.9% +12.0% +10.9% +7.8%
--------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
LFL sales growth -5.3% +2.9% -0.9% +5.0% +5.5% +5.3% +2.1%
--------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Gross margin growth +70bps +120bps +90bps +90bps +50bps +70bps +80bps
--------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Notes to Editors
Dunelm is market leader in the GBP11bn UK homewares market. The
Group currently operates 148 stores, of which 142 are out-of-town
superstores and 6 are located on high streets, and an on-line
store, to be found at www.dunelm.com.
Dunelm's "Simply Value for Money" customer proposition offers
industry-leading choice of quality products at keen prices, with
high levels of availability and supported by friendly service. Core
ranges include many exclusive designs and premium brands such as
Dorma, and are supported by a frequently changing series of special
buys. The superstore format provides an average of 30,000 sq ft of
selling space with over 20,000 products across a broad spectrum of
categories, extending from the Group's home textiles heritage
(bedding, curtains, cushions, quilts and pillows) to a complete
homewares offer including kitchenware and dining, lighting, wall
art, furniture and rugs. Dunelm is one of the few national
retailers to offer an authoritative selection of curtain fabrics on
the roll, and owns a specialist UK facility dedicated to producing
made to measure curtains.
Dunelm was founded in 1979 as a market stall business, selling
ready-made curtains. The first shop was opened in Leicester in 1984
and over the following years the business developed into a
successful chain of high street shops before expanding into broader
homewares categories following the opening of the first Dunelm
superstore in 1991.
Dunelm has been listed on the London Stock Exchange since
October 2006 (DNLM.L) and has a current market capitalisation of
approximately GBP1.8bn.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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